The Thai futures market rocketed to an average of nearly 67,000 transactions a day in January, up by 52% since the end of 2012.
Kesara Manchusree, head of the Stock Exchange of Thailand's markets division, said average daily trade volume on the Thailand Futures Exchange (TFEX) rose sharply, with single stocks a hit with investors instead of SET50 futures.
Year-to-date, trading has averaged 66,763 transactions per day, up from 43,823 at the end of last year.
Single-stock futures have been the most popular, contributing 50.6% of transactions, followed by SET50 futures (26.5%) and gold futures (20%).
"Some 95% of single-stock futures trading is in 10 underlying stocks," said Mrs Kesara.
The 10 popular stocks are BTS, Land and Houses, TMB Bank, Krung Thai Bank, Italian-Thai Development, Quality Houses, Sri Trang Agro-Industry, True Corporation, IRPC and Thoresen Thai Agencies.
Mrs Kesara insisted the popularity of these single-stock futures was not related to speculation in the underlying shares on the SET board.
"We traced backward about three months and found these popular single-stock futures are not for short-term or day trading but for arbitrage and hedging over time," said Mrs Kesara.
TFEX plans to launch an additional 20 single-stock futures next month, bringing the total to 50.
Investors will have the choice of two new sectors on the futures board - hotels and hospitals - bringing the total to 12.
Mrs Kesara said introducing more new single-stock futures will not encourage speculative trading in the futures market, as the new underlying shares are in the SET100 and not the small- and mid-cap shares whose prices have moved in a wide range over the past month.
Underlying shares of new single-stock futures must be SET100 shares with a market cap exceeding 10 billion baht and high liquidity. About 85 stocks meet the criteria.
About the author
- Writer: Darana Chudasri
Position: Business Reporter